3 Reasons Why I'm Buying Nvidia's Stock Like There's No Tomorrow

Nvidia (NASDAQ: NVDA) has been the artificial intelligence (AI) stock to own since 2023. Its performance over this time frame has been incredible, and its latest results were no exception. However, Wall Street seems to be getting bored with the stock.

Similar to how a sports franchise may be loved at the start of a dynasty run, then hated by the end of it, Nvidia seems not to capture the attention of the market anymore. It reported fantastic fourth-quarter results for its fiscal 2025 year (ended Jan. 26), and yet the stock sold off.

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So is this an excellent time to load up on the stock? I've got three reasons why investors should be bullish on Nvidia's stock, not bearish.

1. Blackwell growth

Nvidia's graphics processing units (GPUs) have powered the AI revolution because they can compete in parallel. This makes them perfectly suited to take on complex computing tasks like training AI models. Most of the AI training that we've seen to date has occurred on Nvidia's Hopper architecture, but that's being replaced by its latest design: Blackwell.

Blackwell GPUs provide significant performance boosts over the previous Hopper design, including four times faster AI training. Furthermore, AI inference (which is when an AI model is given an input and a user expects an output) is 20 times cheaper than the Hopper 100 (H100) GPU. Blackwell GPUs will unlock a new phase of AI innovation that we haven't experienced yet, and this will continue to be a boost for Nvidia throughout the year.

Although Blackwell chips made up $11 billion of Nvidia's $35.6 billion in data center revenue, they're still ramping up production on this game-changing product. However, this ramp-up also caused the one negative thing Wall Street focused on during Q4: falling gross margins. Nvidia's management was aware of this, as its gross margins fell from the mid-to high-70% range to 73% in Q4. This pattern should persist through Q1 but recover by the year's end as they become more efficient in producing Blackwell GPUs.

The big item here is to know that these margins will recover, and Nvidia is putting the customer first by getting out as many of its innovative Blackwell chips as possible. This ramp-up will continue to cause Nvidia's revenue to rise, and investors should be very bullish about that, even if its gross margins take a short-term dip.

2. Sustained growth rates

There has never been a company of Nvidia's size that has sustained growth rates as strong as it has during its recent run. In Q4, revenue was up 78% year over year and up 12% over Q3. For Q1, management expects $43 billion in revenue, indicating 65% year over year growth and 9% quarter over quarter growth. However, Nvidia's management has a track record of under-guiding and overdelivering, so the real figures may be a few percentage points higher.

That's stunning growth for a company of Nvidia's size, and Wall Street expects that growth to persist throughout this year and next. For the current fiscal year and next year, Wall Street analysts expect 57% revenue growth and 22% growth, far exceeding what many of Nvidia's big tech peers are putting up.

There is still plenty of growth left in the AI space and other industries that Nvidia supports. The growth is far from over for Nvidia, and it's another bullish reason to purchase the stock.

3. Nvidia's stock is borderline cheap right now

Nvidia shares have sometimes looked rather expensive throughout their run-up over the past few years, but I'd say they're starting to look rather cheap.

NVDA PE Ratio data by YCharts.

Nvidia now trades for about 43 times trailing earnings and 28 times forward earnings and is posting phenomenal growth figures. Let's contrast that with other common big tech companies (like some of the Magnificent Seven).

NVDA PE Ratio data by YCharts.

While Nvidia is still the most expensive by its trailing P/E ratio, it's not by much. When forward earnings are considered, Nvidia is the cheapest of these other big tech companies.

So, why would you buy any of these other three when you can buy the company with the most to benefit from the most important innovation since the Internet? That's exactly why Nvidia is a screaming buy right now, and investors should be loading up on the stock after the weakness from its latest earnings report.

Should you invest $1,000 in Nvidia right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.